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Old Dominion's (ODFL) Q2 Earnings Top Estimates, Decline Y/Y

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Old Dominion Freight Line’s (ODFL - Free Report) second-quarter 2020 earnings per share of $1.25 outpaced the Zacks Consensus Estimate by 22 cents. However, the bottom line contracted 13.2% year over year, mainly due to coronavirus-induced 15.5% year-over-year decline in total revenues to $896.2 million.

The top line, however, surpassed the Zacks Consensus Estimate of $894.9 million. The year-over-year revenue underperformance was due to a 12.1% decrease in LTL (Less-Than-Truckload) tons per day and a 3.8% reduction in LTL revenue per hundredweight as a result of a soft freight environment.

Management stated in the press release that all prior-period share and per share data are adjusted to reflect the three-for-two stock split effectuated in 2020.

Other Details

In the quarter under review, Old Dominion reported a 12.1% drop in LTL tons. Moreover, LTL revenue per hundredweight excluding fuel surcharges dipped 0.5%. LTL weight per shipment rose 5.3%. However, LTL shipments were down 16.6%.

The company’s major revenue generating segment, LTL services, logged a total of $884.1 million, down 15.6% year over year. Revenues from other services fell 9.8% to $12.1 million. Total operating expenses decreased 15.7% to $697 million, mainly owing to the 13.5% reduction in costs pertaining to salaries, wages & benefits.

Despite the revenue deterioration, the operating ratio (operating expenses as a percentage of revenues) improved 10 basis points to 77.8%. Notably, lower the value of this metric the better.

Old Dominion exited the quarter with cash and cash equivalents worth $518.6 million compared with $403.57 million at the end of 2019. Capital expenditures incurred in the reported quarter were $67.9 million. Old Dominion expects a capex of $265 million for 2020. Of the total, $195 million is anticipated to be invested in real estate and service-center expansion. The company expects to spend $20 million and $50 million on tractors/trailers, and technology and other assets, respectively.

During the second quarter, Old Dominion, currently carrying a Zacks Rank #3 (Hold), rewarded its shareholders with $146.1 million through buybacks ($128.5 million) and dividends ($17.6 million). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sectorial Snapshots

Let’s take a look into some other Zacks Transportation sector companies’ second-quarter earnings.

J.B. Hunt Transport (JBHT - Free Report) , carrying a Zacks Rank #3 (Hold) at present, reported second-quarter earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.

Kansas City Southern’s second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. This currently Zacks Rank #3 (Hold) company’s total revenues of $547.9 million lagged the consensus mark of $550.2 million.

Canadian National’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line of this presently Zacks Rank #2 company declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and also fell 21.8% year over year.

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